May 10 (Reuters) -
Nonferrous metals prices advanced on Friday, fuelled by risk-on sentiment and short-covering after higher unemployment in the United States renewed hopes of interest rate cuts by the Federal Reserve.
Three-month copper on the London Metal Exchange (LME) rose 1.4% to $10,045 per metric ton by 0627 GMT, while the most-traded June copper contract on the Shanghai Futures Exchange (SHFE) increased 1.3% to 80,830 yuan ($11,189.09) a ton.
"Overnight jobless numbers from the U.S ... (means) rate cuts are still going to happen," said a metals trader, adding that funds are having risk-on sentiment.
"Flat prices are higher, so more short (positions holders) have to cover," the trader added.
U.S. unemployment claims rose last week to the highest level in more than eight months, offering more evidence that the labour market was steadily cooling.
A rate cut could help boost economic growth and physical demand for metal, while it might also lead to a softer dollar.
A weaker dollar makes greenback-priced metals cheaper to holders of other currencies.
The dollar index was nearly flat on Friday, after dropping 0.3% in the previous session, the biggest daily fall in more than a week.
LME aluminium was up 1% at $2,586 a ton, nickel edged up 0.4% at $19,110, zinc advanced 1% to $2,938, lead increased 0.6% to $2,247 and tin was nearly flat at $32,800.
SHFE aluminium rose 0.7% to 20,720 yuan a ton, nickel increased 1.8% to 144,110 yuan, tin jumped 2.8% to 266,770 yuan, and lead advanced 0.7% to 18,130 yuan.
Meanwhile, Britain's economy grew by the most in nearly three years in the first quarter of 2024, ending the shallow recession it entered in the second half of last year.
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($1 = 7.2240 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu and Sohini Goswami)
